SBI economists said in a report that if brought under the purview of GST, then the price of petrol across the country could be reduced by up to 75 liters.
Finance Minister Nirmala Sitharaman on Friday admitted that consumers have a case for reducing the prices of petrol and diesel, but said the reduction in taxes should be a joint call of the central and state governments to do so.
60% of the petrol retail price, which has gone above the 100-mark mark in some places in Rajasthan, Madhya Pradesh and Maharashtra and is at a higher level elsewhere in the country, is made up of central and state taxes. Taxes make up about 56 percent of the record diesel rates.
Ms. Sitharaman, who raised the central excise duty on petrol and diesel by a record margin last year, to cut the central taxes, to reduce profits by reaching a two-decade low in international oil prices. I was noncompetitive to take the first step. Relieving consumers.
For consumers, “it is a sufficient case to say that the fall in prices, should be its burden,” he said while interacting with reporters at the WWPC. He said that the burden on consumers was “understood”, while pricing was a serious issue.
“This is where I use the word ‘religion',” he said. “This is a question about which I would like to talk to the states and the Center because it is not just the Center which has a duty on petroleum products, it also has a state fee.” He said that both the states and the Center extracted revenue from taxes levied on petrol and diesel, adding that 41% of the tax collection made by the Center goes to the states.
“So there is an issue that is layered and as a result it is the ideal thing for the Center and the states to do,” she said.
On the issue of bringing petrol and diesel under the Goods and Services Tax (GST) regime, which would end the cascading effect of taxes and bring in uniformity, the Finance Minister said that the call has to be taken by the GST Council, which is doing it at the top level is. The body of the indirect tax system.
Currently, the central government levies a fixed rate of excise, while states levy different rates of VAT. Under the GST, the two would merge and bring in uniformity, thereby resolving the problem of fuel rates in states with high VAT.
“Whenever the GST Council decides to take up the issue, they are well within their interest to take it up and discuss it. This is a call the council has to take.
Asked whether the Center would take such a proposal to the council in the next meeting this month, he said that a call would be taken closer to the date of the council meeting. Ms. Sitharaman raised the excise duty on petrol and diesel at the rate of ₹ 13 and ₹ 16 per liter on petrol and diesel respectively from March 2020 to May 2020, and now a liter price of petrol in Delhi is more than one-third from 7 91.17. Diesel cent at a rate of 81.47 per liter.
Earlier this week, SBI economists had said in a report that if brought under the purview of GST, the price of petrol across the country could decrease by up to 75 liters.
According to a calculation made by economists at a global crude oil price estimate of $ 60 per barrel, diesel would cost ₹ 68 per liter and revenue loss to the Center and the states would be only ₹ 1 lakh crore or 0.4% of GDP. Exchange rate. 73 per dollar.